Hee GST, MARCH/APRIL - 2023 V Semester B.Com. Examination, April/May — 2023 (CBCS) (E+R) (2017 — 18 and onwards) . COMMERCE QP Code: 63526 Paper — 5.6 : Elective Paper ods and Service Tax SECTION-A 1. ANSWER ANY FIVE OF THE FOLLOWING SUB-QUESTIONS. (6x2=10) (a) Define GST. The term ‘GST" is defined in Article 366 (12) to mean “any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption” (b)Give the meaning of exempt supply. Exempt supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply. (©) Expand TDS and TCS: * TDS: — Tax Deducted at Source * TCS: Tax Collection at Source (@Who is required to furnish final return? Any registered taxable person whose registration has been cancelled is required to file final return in form GSTR-10. The retum has to file within 3 months from the date of cancellation or date of order of cancellation whichever is earlier. (e) Name any four participants of GST Eco System. Stake Holders, Central and State tax authorities, RBI & Banks, and Tax Professionals (0) Write any two advantages of GST? + GST will end cascading of Taxes © Availability of the input credit across the value chain. ‘+ Reduction in the complications in tax administration and compliance. © Unified law involving all the tax bases, laws and administration. procedures across the country, (g) Define job work? Job Work [Section 2(68)] means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly. SECTION-B ANSWER ANY THREE OF THE FOLLOWING (3x6=18) 2. Write a note on Indian’ GST Model. India adopted a dual GST where tax imposed concurrently by the Central and States. Goods and Service Tax Tntra State Transaction (In same state)) (Inter State Transaction (In different states) ¥ (CGST+SGST) / (CGST + UTGST) Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM jo |GST, MARCH/APRIL - 2023 ‘© Central Goods and Services Tax Act, 2017 (CGST): CGST levied and collected by Central Government. It is a revenue source to the Central Government of India, on intra-state supplies of taxable goods or services or both. ‘© State Goods and Services Tax Act, 2017 (SGST): SGST levied and collected by State Governments/Union Territories with State Legislatures (namely Delhi and Pondicherry) on intra- state supplies of taxable goods or services or both. It is a revenue source of the respective State Government. © Union Territory Goods and Services Tax (UTGST): UTGST levied and collected by Union ‘Territories without State Legislatures, on intra-state supplies of taxable goods or services or both. Note: India is a Union of States. The territory of India comprises of the territories of the States and the Union Territories. Currently, there are 28 States and 8 Union Territories; of which, two (Delhi and Pondicherry) are having Legislature © GST —in Union Territories without Legislature: Supplies within such Union territory, Central GST will apply to whole of India and hence, it would be applicable to all Union Territories, with or without Legislature. To replicate the law similar to State GST to. Union Territories without Legislature, the Parliament has the powers under Article 246(4) to make such laws. Alternatively, the President of India may use his general powers to formulate such laws Hence, law same as similar to State GST can be formulated for Union Territory without Legislature, by the Parliament. The following are Union Territories without Legislature 1. Chandigarh 2. Lakshadweep 3. Dadra and Nagar Haveli & Daman and Diu 4. Andaman and Nicobar Islands 5. Jammu and Kashmir 6. Ladakh ‘© Integrated Goods and Services Tax Act, 2017 (IGST): IGST is a mechanism to monitor the inter-state trade of goods and services and ensure that the SGST component accrues to the Consumer State. It would maintain the integrity of ITC chain in inter-state supplies. The IGST tate would broadly be equal to CGST rate plus SGST rate. IGST would be levied and collected by the Central Government on all inter-State transactions of taxable goods or services. The revenue of inter-state sales will not accrue to the exporting state and the exporting state will be required to transfer to the Centre the credit of SGST/UTGST used in payment of IGST. 3. What are the major functions of GSTN? The following are major functions of the GSTN: (a) Facilitating registration of vendors (0)E-filing and forwarding the returns to Central and State tax authorities; (©) Computation and settlement of IGST; (d) Matching of tax payment details with banking network; (©) Providing various MIS reports to Governments based on the taxpayer retum information. (P Analysis of taxpayers’ profile (g)Running the matching engine for matching, reversal and reclaim of input tax credit. (h)Facilitate in the implementation and set standards for providing services to the taxpayer through common GST Portal to state Government and stake holders. Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM EleA ee eee 4. Determination of Time of supply GST, MARCH/APRIL - 2023 si} Dateot | Duedateof — Datewhen goods | ite oe BTID) No.| invoice | S8ue of invoice made available to | AT? U/S 31(1) recipient 1_| 03/01/2023 | 01/01/2023 10/01/2023 01/01/2023 2_| 05/02/2023 | 15/02/2023 __|__17/02/2023 15/02/2023 3 | 10/03/2023 | 10/03/2023 |_15/03/2023 10/03/2023 4 | 08/01/2023 | 10/01/2023 10/01/2023 5 5_| 12/01/2023 023. | 10/01/2023 | - 6 | 10/02/2023 | 14/02/2023 14/02/2023 2 TOs) ‘Note: Time of supply of goods under forward charge [section 12(2)] Earliest of the following: (a) Date of invoice / (b)Due date of issue of invoice U/S 31(1) Before or at the of: % Date of Delivery of goods or Making available thereof to the recipient * Date of Removal of goods 5. Calculation of transaction value and GST payable Particulars z Price of goods Add: Inclusions not included in the sale price Packing charges 22,500 Freight and eartage charges 18,000 Transit insurance 15,000 Special packing charges 4,500 Extra designing charges 8,000 | 68,000 518,000 Less: Trade Discount Transaction value U/S 15 ‘Add: _IGST (5,08,000 * 18° Invoice Price 5,99,440 6. Calculation of Transaction Value and GST Payable. ‘Assumed that | Assumed that Particulars HO and Branch | HO and Branch having same | having Different Reg. No. @) Reg. No. @) Sales made to a registered dealer in Mangalore 12,00,000 Sales made to a registered dealer in Dhavanagere 6,50,000 Goods transferred to a branch in Kolar - 18,50,000 Less: Returns: Goods retuned from dealer of Mangalore 50,500 Goods retuned from Kolar Branch svM 7 Chiotamani — 9745082528 / 9986658 Transaction Value EAD ) mae 444,501 » | Sei Sai Vishwe TurHee GST, MARCH/APRIL - 2023 Calculation of GST Payable: Assumed that H.O. | Assumed that H.O. and Branch having | and Branch having same Reg. No. Different Reg. No. @ @ 2,86,230 286,230 Particulars GST Payable =Transaction Value = Rate of GST ¥ SGST payable = 17,99,500 or 20,44,500*14% ¥ CGST payable Total GST Payable Notes: ¥ Goods retumed within 6 months from the end of the financial year or date of filling annual retum, whichever is earlier can be deductable from the sale. ¥ No GST will be involved on stock transfer when the branches are having same registration number. SECTION-C ANSWER ANY THREE OF THE FOLLOWING (3x14=42) 7. Features of GST The salient features of GST are as under: (a) Tax Incidence: GST would be applicable on supply of goods or services as against the present concept of tax on the manufacture of goods or on sale of goods or on provision of services. (b) Destination based Tax: - The GST is a destination based tax on consumption of Goods and Services. Hence the credit of SGST shall be transferred to the Destination State in the form of Integrated GST (IGST). IGST will be imposed on all Inter-State Transactions. (©) GST is a Value Added Tax: Since only the value added at each stage is taxed under GST, It can be termed as value added tax. (d) No Cascading of Taxes: GST is a Value Added Tax, so there is no tax on tax or cascading of taxes under GST. (©) The GST shall have two components: one levied by the Centre (referred to as Central GST or GST), and the other levied by the States (referred to as State GST or SGST). Rates for Central GST and State GST would be approved appropriately, reflecting revenue considerations and acceptability. () Dual GST Model: The CGST and SGST are to be paid to the accounts of the Centre and the States respectively (g) GST would apply to all goods and services except Aleohol for human consumption. (h) Availability of Tax Credit: In respect of taxes paid on any supply of goods or services or both used or intended to be used in the course business. (i) Assessment: Registered person will be allowed himself to assess the taxes payable under the GST Laws and fumish a retum for each Tax Period. (i) Threshold Limi (k) Composition Scheme: The GST Laws will provide a composition scheme for small dealers Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM | | There shall be a taxable limit.GST, MARCH/APRIL - 2023 Composition Scheme — Applicable GST Rates Type of Business Threshold limit CGST | SGST (Aggregate turnover) Manufacturer and traders (Goods) | %75 Lakhs for Special | 0.50% | 0.50% category states and21.5 559% | 250% Crores for reaming Sates ¥ Other service providers | __ 50 Lakhs [3.00% | 3.00% () GSTIN (GST Identification Number) is PAN based: Every registrants or dealers (including Exporters and Importers) shall be given a PAN based TIN number which shall be a common to the both the State GST and Central GST. (m) Compensation to States: The GST Laws provides for payment of compensation to the States for loss of revenue, if any, arising out of implementing of the Goods and Services Tax for a period of 5 years. (a) The GST Council: The Council is a quasi — judicial body of States and the Centre, represented by the State Finance Ministers or Taxation Ministers and the Finance Minister of India. The key tole of this Council is to make recommendations on-various provisions of GST Laws to the State and the Centre. (0) Anti-Profiteering Measures: It is expected the GST Laws will bring down the prices of goods and services once implemented. To ensure the pass of such benefits to end users or the customers, the government has put anti-profiteering measures. (p) Transition: Elaborate ‘Transitions Provisions” for smooth transition of existing tax payers to new Indirect Tax Regime provided: (q) Utilization of Levy: Levies from State GST (SGST) & Central GST (CGST) shall form part of State and the Centre respectively and no cross-utilization shall be allowed. It is expected that the GST Laws or new indirect tax regime, brings benefits to all the stakeholders’ viz. industry, government and the citizens. Further, lower the cost of goods and services, boost the economy and make our products and services globally competitive ¥ Restaurant not serving alcohol 8. Salient features of CGST Act, 2017 1. This Act may be called the Central Goods and Services Tax Act, 2017 . It is levied by central government to replace the existing tax like Service tax, Excise, etc. . It is applicable only within the state. |. The credit of CGST is available only against CGST and IGST. . There shall be a Threshold Limit. . Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. . It makes provision for self-assessment of the tax payable by registered person; 8. Small taxpayers with an aggregate tumover in a financial year up to 275 Lakhs for Special category states and &1.5 Crores for reaming Sates shall be eligible for composition levy an kwN a Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM js |Hee GST, MARCH/APRIL - 2023 9. Solutio Calculation of transaction value U/S 15 and GST payable Particulars z z Price of Solar Lights 11,50,000 Add: Inclusions not included 1. Installation and erection expenses charged separately | 50,000 2. Packing charges (Primary and Secondary) 20,000 3. Design and engineering charges paid by the buyer 20,000 4. Cost of material supplied by the buyer free of charge | 4,000 5, Warranty charges 10,000 6. Subsidy from NGO 25,000 7. Pre-délivery inspection charges 5,000 8. Loading and handling charges within the factory 6,000 9. Municipal Taxes 2,000 | 1,42,000| _1,42,000 12,92,000 | 12,92,000 Less: Cash Discount (11,50,000 = 3%) or (12,92,000* 3%) 34,500 38,760 12,57,500 | 12,53,240 Add: | Bought-out-accessories 15,000] 15,000 Transaction value U/S 15 Add; IGST payable = 12,72,500«28% or 12.68.240*28% Invoice Price 16,28,800 | 16,23,347 10.Calculation of value of taxable services and GST payable Nature of] Taxable | CGST | SGST supply | Value | @9% | @9% 1. Services providing to foreign diplomatic mission | Tntra | 15,00,000 | 1,35,000 | 1.35,000 Particulars 2. Advertisement in print media Intra | 5,00,000| 45,000| 45,000 3. Services by way of private tuitions Intra | 3,00,000/ 27,000] 27,000 4. Speed post & express parcel post services Intra | 2,20,000| 19,800] 19,800 5. Building given on rent for commercial purpose | Intra | 1,50,000) 13,500] 13,500 6. Renting of Agro machinery. for agriculture purpose Intra_| Exempt » - 7. Services rendered to UNO Intra | Exempt P - 8. Certification for exchange control purpose Intra 2,50,000| 22,500 9. Secretarial auditing Intra | 4,50,000| 40,500 10.Value of free services rendered to friends Intra 2,80,000 | 25,200 11.Fees to act as a Liquidator Intra | 8,00,000| 72,000 12.Services relating to supply of farm labour Intra | Exempt - 13.Sale of time slot to broadcasting organization Intra. | 5,00,000| 45,000 14.Services rendered within Indian territorial water_| Intra Total value of taxable services and GST payable Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM EzHee GST, MARCH/APRIL - 2023 11.Solut Calculation of ITC Eligible IGST CGST SGST Particulars ® | ® ® Input Tax Credit Eligible (a) Input ‘A’ Purchased from Mysore (6,50,000 * 6% each) (b)Input ‘B’ Purchased from local Market (7.00,000 x 0%) 0 0 (©) Raw material Purchased from Russia (1 1,00,000*18%) (@)Local Purchase of Input ‘C’ Within the state who opted composition scheme (ITC Not Eligible) | 39,000 | 39,000 | (@)Input Purchased from unregistered dealer in Salem ITC Eligible (A) ‘+ Purchases from a composition dealer and unregistered person are not eligible for credit under GST since the definition of Input Tax U/S 2(62) excludes the tax paid under composition levy. ‘+ Purchases from unregistered dealer are liable for GST on RCM basis. It is assumed that GST is paid and it is eligible for credit. Calculation of output GST payable EL ulars IGST | CGST | SGST @) @® @® ‘Output tax liability | (a)Sale of goods to a person (Delhi) who opted for composition | 49 oq) _ . | scheme (8,00,000° 5%) ? | (©)Goods sold to a unregistered dealer in Chennai (20,50,000 x | . 46 ggg 12%) oe a y (©) Sale of goods to Nagapur (Maharastra) Produced from input | 1 9 999) | _ f “B° (10,00,00018%) Mp (@)Sale of goods purchased from inputs “C” to a registered dealer in kadapa (AP) which are exempted from GST - = y (© Sale of goods purchased from inputs ‘A’ to SEZ, Mangalore - (Zero rated supplies) - i - Output GST Payable(B) Re Calculation of Net GST payable by M/S Moosa & Co. Particulars IGST (®) | CGST® | SGST@) Input Tax Credit Eligible (A) 2,70,000| 39,000 39,000 ‘Output tax liability (B) 4,66,000] - Less: Input Tax Credit utilized: 1. IGST Credit utilized for IGST Liability 2,70,000 2. CGST Credit utilized for IGST Liability 39,000 3._SGST Credit utilized for IGST Liability Net GST Payable Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM EzFr ee meee GST, MARCH/APRIL - 2023 Calculation of Surplus Credit Forward Particulars IGST @) | CGST@ | SGST®@ Input Tax Credit Eligible (A) 2,70,000 39,000] 39,000 Less: Input Tax Credit utilized: IGST Credit utilized for IGST Liability 2,70,000 CGST Credit utilized for IGST Liability 39,000 SGST Credit utilized for IGST Liability 39,000 Surplus Credit Forward = - OR Calculation of ITC Eligible IGST CGST SGST Particulars ® ® ® Input Tax Credit Eligible (a) Input ‘A’ Purchased from Mysore (6,50,000 * 6% each) - 39,000 | 39,000 (b)Input ‘B’ Purchased from local Market (7,00,000 x 0%) : 0 0 (©) Raw material Purchased from Russia (11,00,000*18%) | 1,98,000) - 7 (@)Local Purchase of Input ‘C’ Within the state who opted composition scheme (ITC Not Eligible) 7 - ° (e) Input Purchased from unregistered dealer in Salem. 7 - - ITC Eligible (A) Calculation of Net GST payable by M/S Moosa & Co. Particulars IGST (%) | CGST® | SGST® | Input Tax Credit Eligible (A) 1,98,000 | 39,000| 39,000 ‘Output tax liability (B) 4,66,000| = - Less: Input Tax Credit utilized: 1. IGST Credit utilized for IGST Liability 1,98,000 2. CGST Credit utilized for IGST Liability 39,000 3, SGST Credit utilized for IGST Liabilit 39.000 Net GST Payable Sri Sai Vishwa Tutorial. Chiotamani — 9745082528 | 9986658577 — SVM El